Government promises help for struggling first time buyers

14 May 2008 / by Daniela Gieseler

The Government published a draft legislative programme for 2008-2009 today, 'Preparing Britain for the Future', which includes plans to provide help for first-time buyers by giving them a wider access to shared equity schemes.

The Government will make up to £200 million available to buy unsold new homes on the open market, either to rent them out to social tenants or to offer them to first-time buyers for purchase through the Homebuy scheme.

Thus, for the first time all first time buyers with an income under £60,000 will have the opportunity to apply to buy a share of their home, and a newly introduced shared equity first time buyer schemes for new-builds will help thousands to get their foot on the property ladder.

The Council of Mortgage Lenders (CML) welcomed the new scheme and commented that, although these measures will have only a relatively modest impact on the housing market, they will have the potential to widen the first-time buyer shared equity scheme.

A separate announcement of a market study of the sale-and-leaseback sector by the Office of Fair Trading was also welcomed by the CML.

Lenders endorse the regulation of sale-and-leaseback in order to deliver fairer and more consistent treatment of homeowners choosing this option as a means of dealing with mortgage payment problems.

CML's Director General Michael Coogan commented on the government initiative:

"The government's announcement on shared equity means that its approach is now more logical, providing help based on the income rather than the occupation of buyers."

For the CML, it is about time that this change happens: "It will remove an anomaly by which providing help for one group of less well-paid workers makes access to home-ownership more difficult for others earning similar salaries but working in different jobs."